As auto service revenue continues to decline at many car dealerships, Chrysler Group L.L.C. is pushing its dealers to open more of the company's Express Lane quick-service operations.
The auto maker launched Express Lane in 2008 to increase customer awareness that car dealers could change oil, wipers and tires as well as quick-service chains, but only about 150 Chrysler dealerships use the Express Lane brand at their operations and the effort stalled last year with Chrysler's bankruptcy. About 1,000 other Chrysler stores have some kind of quick-service offering but don't bill it as Express Lane.
When it comes to slashing the time customers spend on quick maintenance, Conrad Letson and Jerry Jackson tried pretty much everything at their respective auto dealerships. Both ended up frustrated.
“I've tried multiple things, from separate shops to putting an actual lift right in the service drive of one of the stores,” said Mr. Letson, general manager of Greenway Dodge-Chrysler-Jeep in Orlando, Fla. “It was still taking us 45 minutes to an hour to get the customer in and out.”
Then in 2008, Mr. Letson took on the Express Lane-branded service program from Chrysler's Mopar parts unit. Since then, his service technicians have been getting customers in and out in 20 minutes or less, including time spent on paperwork.
Mr. Letson was one of the initial car dealers who signed up after Chrysler originally launched Express Lane.
Now Mopar CEO Pietro Gorlier is starting a push to sign up dealers and invigorate the Express Lane brand. He wants 80 percent of Chrysler's 2,352 dealerships to offer Express Lane services.
“In the last two years, with the economy down, all dealers are looking to add to their after-sales business,” he said in an interview with Automotive News at the National Automobile Dealers Association (NADA) convention, held in February in Orlando.
“It's not an option not to have Express Lane if you want to be in the after-sales business,” Mr. Gorlier said. “Every dealer that has opened an Express Lane has experienced an immediate increase in business.”
Mr. Gorlier said he believes Chrysler dealers can compete with the quick maintenance chains on routine maintenance if they can guarantee that vehicles will be serviced in 15 or 20 minutes. He added that “every dealer that has opened an Express Lane has experienced an immediate increase in business.”
Mr. Jackson, service manager at Dallas Dodge-Chrysler-Jeep, said his dealership has increased the number of oil changes it does per month to about 2,000 from 1,200 since launching Express Lane. Like Mr. Letson, Mr. Jackson had tried multiple approaches to improve his quick-maintenance business.
“You have to dedicate somebody who will manage this as a business inside of a business,” he said. “We kept trying to run it with the regular mainstream part of the dealership, and it just didn't flow right. We couldn't get paperwork flow and couldn't get customers turned fast enough.”
Mr. Jackson decided he needed to devote teams of workers to that job alone.
“I've got a team of technicians working kind of like a NASCAR pit crew—two at a time working cars as fast as we can,” he said. “I've got guys who can do the inspection, change oil and filter and get the customer out in 10 or 15 minutes.”
Mr. Jackson has turned over more than 150 orders on some Saturdays, when he has five two-man teams working.
Car dealers shouldn't view quick-maintenance programs such as Express Lane as a panacea, said Ed Kovalchick, CEO of Net Profit Inc., an Alabaster, Ala., auto dealer consultancy.
“The gross profit generated in a lube stall is maybe $6,000 to 8,000 a month,” Mr. Kovalchick said. “It's better than no money, but it's not significant.”
He said dealerships will struggle to compete with Jiffy Lube International Inc. and similar operations. Dealerships need to play to their strengths and present a mix of service offerings, including repairs on second- and third-owner vehicles that result in larger service tickets, Mr. Kovalchick said.
“If you look at Jiffy Lube, they have very small stalls, very little overhead,” he added.
Mr. Letson acknowledged that his Express Lane margins are thin but said big profits aren't the real goal.
“If customers continue to service the vehicle through the warranty and beyond,” he noted, “they're twice as likely to come back to the dealership and buy our products when they're ready to purchase something new.”
Mopar offers to send experts to its dealerships to assess whether adding Express Lane would bring in sufficient revenue.
“One of the things they do is streamline and stopwatch you going through the current process,” Mr. Letson said. “It's not cookie-cutter. It will be a little different for each dealership.”
Mopar subcontracts with a company called Service Operations Specialists in Little Rock, Ark., to provide expertise for Express Lane. Blake Price, CEO of Service Operations Specialists, said dealers who add Express Lane increase routine maintenance service by 50 percent within the first six months.
But the program does more than that, Mr. Price said: “We pick up incremental sales and throw a lot of the work to the main (service) shop.”
This report appeared in Automotive News, a Detroit-based sister publication of Tire Business.
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